The Hindu Business Line : CIBIL flags off operations for retail credit information

THE Credit Information Bureau (India) Ltd has finally been launched for banks, FIs and other financiers to share retail and commercial customer information. The bureau, the first of its kind in India, will provide both positive and negative information on bank borrowers.

Until today, banks had no way of checking the credit worthiness of retail customers while the scene was a tad better on the corporate lending front since competitor banks, vendors, suppliers helped in understanding the worthiness of the borrower.

Mr Satish Mehta, MD, Credit Information Bureau (India) Ltd (CIBIL), at a press conference to announce the company's start of formal operations, said, ``Banks have already started accessing the credit records on customers. Currently 5.5 million records of retail customers have been generated. CIBIL will help banks take speedier and more objective credit decisions possibly at a lower price. At a systemic level, it should help bring down NPAs currently pegged at Rs 70,000 crore.''

CIBIL provides data on the current total outstanding debt. It gives both positive data such as the address of the customer and loan repayment records as well as negative data like penalties and defaults. As of now, only 13 out of 87 members have shared their entire customer data with CIBIL. The challenge is in getting valid information particularly from PSU banks many of which are not fully computerised and do not maintain accurate MIS reports.

Mr Neeraj Swaroop, Head-Retail, HDFC Bank, said, ``This is a great step forward for the banking system and we will soon start accessing records from CIBIL. However, the data may become rich only over 3-6 months as more players share data.''

For a bank to access the CIBIL database of customers, it can post a query through the Internet, through lease lines or in the CD format. CIBIL will respond in a matter of seconds through the same mode.

CIBIL, promoted by HDFC and State Bank of India, will work on the principle of reciprocity. Only those members who provide data will have access to information from CIBIL.

CIBIL's members include all major players and constitute 80 per cent of the banking sector assets. The members, the names of which were not given out, consist of 60 banks, eight FIs, eight NBFCs, eight HFCs, two state finance corporations and one credit card company. They are expected to share their data over 3-6 months.